How Often Should I Review My Disability Insurance Plan?

Disability income insurance is the safety net of a person who lives off his or her earnings on a daily basis. How often do you think about reviewing your plan? Chances are very high that you never thought about it in years – at least until something changed for you. By then, it might be too late to correct matters around without increasing the costs or filling coverage gaps. In this blog, we'll explain how often you should review your Disability Insurance, the main signs it's time to, and why keeping it updated is very important for your financial peace of mind. Along the way, we'll share real-life struggles our clients at the best insurance brokerage, Canadian LIC, have faced through outdated policies, making this information not only theoretical but practical and actionable.

Why Reviewing Your Disability Insurance Plan Matters

At Canadian LIC, we see repeats just too often. Clients come to us with a sudden life event that leaves them requiring a change in their Disability Insurance Policies, only to realize it's too late or the cost too high. One of our clients, Sarah, was rendered unable to work due to a car accident. She felt quite convinced that her Disability Insurance would be good enough for what she needed. When she reached out to us, though, we found that her policy was out of date. It provided hardly any coverage; the amount would not even be enough to give her cover when given her new financial responsibilities, and tweaking the plan now would cost her much more than it is worth.

The common problem this situation presents is a bad practice whereby people fail to review their Disability Insurance regularly. Such practice might be attributed to one of two reasons: perhaps one believes they are covered, or perhaps just due to the busy schedule of life, one may forget about them. It is one mistake that you can avoid by reviewing your Disability Insurance regularly. So how often should it be done? Let's break it down.

How Often Should You Review Your Disability Insurance Plan?

The truth of the matter is that no one-size-fits-all rule applies, but generally speaking, at Canadian LIC, we like to recommend that you review your Disability Insurance Policies at least once every two to three years. This will keep you in front of higher cost hikes or changes in policy and will result in you paying what you only need to pay.

Reviewing your policy every year could be a very good idea for some people, especially when you have experienced some great life changes. For example, did you get married, have children, buy a house, or take on new debts? Most probably, your existing policy will no longer offer enough coverage. One of our clients, James, welcomed his first child and failed to look into reviewing his Disability Insurance when one of them happened. A few years later, when he needed to make a claim, he realized it hadn't accounted for his new financial responsibilities and had a shortfall in coverage.

Key Life Events that Require a Disability Insurance Review

Well, changes in life are the biggest pointers one needs to check on the current status of his or her Disability Policy . Here are examples of these changes that should cause you to look deeper into your policy:

• Marriage or Divorce: When you get married or divorced, your financial situation changes. Your spouse might rely on your income, or you might need to ensure that you can cover new costs on your own.
• Having Children: Children come with new responsibilities, and raising them is expensive. A policy review ensures that your family will be cared for financially, even if you're unable to work.
• Buying a Home: A new mortgage is a significant financial commitment. Adjusting your Disability Insurance Quote to cover the cost of your home in case you can't work is crucial.
• Changes in Income: If you've gotten a raise or changed jobs, your income level may be different. Ensuring your Disability Insurance reflects this new income is vital to maintaining the quality of life you've worked hard for.
• Health Changes: A change in your health may create more of a need for you to claim your Disability Insurance in the future. At Canadian LIC, we often see clients, such as Maria, who contracted a chronic condition but hadn't reviewed their policy for several years. Sadly, her old plan didn't have a rider for her condition, and adding it afterwards was very costly and full of issues.

How to Review Your Disability Insurance Plan

Now that you know when you will review your Disability Insurance, let's talk about how. Looking over your policy isn't at all difficult. As a matter of fact, this process can be pretty straightforward when you work with a trusted advisor, such as Canadian LIC. Here's a step-by-step guide that will take you through it:

• Contact Your Broker: Your broker can help you assess whether your current plan is still appropriate for your needs. They will take into account any changes in your life and help you get an updated Disability Insurance Quote if needed.
• Check Your Coverage Amount: Ask yourself, "Is the current coverage amount enough?" Make sure your policy will still cover your expenses in case you become unable to work.
• Review the Type of Coverage: Does your policy offer short-term or long-term disability coverage? Are there any gaps that need to be filled?
• Look for Premium Changes: Over time, your Disability Insurance Cost may go up, particularly if you haven't reviewed your policy in years. Checking for these changes now can help you avoid unpleasant surprises later.

The Cost of Not Reviewing Your Disability Insurance Plan

They may let their Disability Insurance lapse by failing to review the plan that is in place regularly. If they do remember to update the plan only when it is too late, it could be too late to make any necessary changes to the policy without little-known costs. We have had clients like Rob, who didn't realize his policy only covered 50 percent of his income. By the time he needed to file a claim, he could not increase his coverage without paying a big premium.

Another good point is that your Disability Insurance Cost may rise as you grow older. If you look around and lock into a good policy earlier, you are less likely to be concerned about increasing premiums . So, it's no longer a question of having coverage versus not having coverage but how much coverage is available and at what price.

Conclusion: Take Action Today with Canadian LIC

First, generally, review your Disability Insurance Policies regularly for relevance and cost. Life changes, shifts in income and changing responsibilities make the Disability Insurance plan as dynamic as your life. So, don't wait until it's too late.

To stay ahead of the curve, we keep updated information and can assist you with whatever needs you may have, such as updating your Disability Insurance Quote or perhaps updating your policy to reflect today's needs. At Canadian LIC, we are here every step of the way to walk you through the plan that will suit you best. Contact us today, and let us go through your plan. We have helped several clients avoid financial ruin because of outdated policies, and we are confident that we could do the same for you.

FAQs

How often should I review my Disability Insurance plan?

It's recommended to review your policy every two to three years or more frequently if you experience major life changes.

Can I adjust my policy after a life event?

Yes, it's essential to adjust your Disability Insurance after significant life changes like marriage, having children, or buying a home.

Will reviewing my policy increase my premiums?

Not necessarily. A review ensures your coverage is adequate, and if changes are needed, we can help you find cost-effective options.

What is a Disability Insurance Quote?

A Disability Insurance Quote is an estimate of the premium cost for a Disability Insurance policy based on your needs and health status.

Does the cost of Disability Insurance increase with age?

Yes, your Disability Insurance Cost may increase as you age, so reviewing and locking in coverage earlier is essential to avoid rising costs.